UK mortgage approvals hit highest level in more than a year

Banks approved the highest number of mortgages in October in more than a year
in the latest sign that the slump in UK house prices is ending.

9:55AM GMT 30 Nov 2009

Approvals reached 57,345 in October, the highest level since March 2008, and up from 56,205 in September, according to fresh figures from the Bank of England.

The figures come on the back of a survey today from Hometrack which showed that prices rose for a fourth consecutive month in November as a shortage of homes helped drive up prices. Overall prices climbed 0.2pc in the month to £156,700, the survey showed.

The resilience of the housing market has caught most forecasters by surprise this year given the life support that many lenders are still on. Nationwide and Halifax, authors of the two most widely-watched survey of prices, have both cautioned that the rally is being driven by a shortage of supply and will lose steam next year.

"We will see mortgage approvals continue to rise but not to anywhere near the sort of levels we saw pre-crisis," George Buckley, an economist at Deutsche Bank, told Bloomberg. "The economy's recovery will be slow and steady to begin with but I'm not sure that's sustainable. We will see some bumps along the way."

Separate figures underlined the headwinds a recovery in the UK still faces. A survey of consumers' confidence compiled by Gfk NOP showed that confidence fell 4 points to -17 this month. Meanwhile, net consumer credit tumbled £713m, the most since records started in 1993, as Britons steered clear of adding to their debts.